Occam's razor, in its current most popular form, is shorthand for arguing that when one has two theories that arrive at the same conclusion, or that make the same prediction, the simpler theory is the better. In terms of the Californian, it seems altogether more convoluted to postulate and maintain the existence of a third vessel, when the California fits the bill adequately; after all, there seems little reasonable doubt that there WAS another vessel near the Titanic.
Also new here myself. I've seen the term before, and know it's used in the sciences. Hold on ... I have a book that talks about its derivation ...
OK. From "Eureka!: 81 Key Ideas Explained", by Michael Macrone (1994. Cader Company, Inc.), it was espoused by "William of Ockham (Occam is the Latinized form), an English theologian of the early fourteenth century."
His "razor" was the "logical implement he wielded to trim absurdities out of arguments." The idea was that "if it isn't necessary to introduce complexities and hypotheticals into an argument, don't do it; not only will the result be less elegant and convincing, it will also less likely be correct."
As a side note, I too wonder about all the hubbub. Regardless of any other questions, didn't the Californian admittedly observe distress rockets and do nothing? Doesn't that make it the ship that _stood_ still, not might have?